Medicare Set Aside and MMSEA Section 111 Legal Cases - Medicare Advantage Plan Case

Blackburn Group, Inc. MSA and MMSEA Section 111 Legal Cases - Sylvia Potts, et.al. v. The Rawlings Company, LLC, et.al; 11 Civ. 9071, September 25, 1012

In the case of Sylvia Potts, Roland Smith, and Loretha Smith, et.al. v. The Rawlings Company, LLC, Ingenix Inc., Emblem Health Company of New York, Inc., Ovations, Inc., Oxford Health Plans (NY), Inc., and United Health Group, Inc.; 11 Civ. 9071, September 25, 1012, the U.S. District Court, Southern District of New York, heard a putative class action by enrollees in Medicare Advantage plans seeking a declaratory judgment that, pursuant to New York State General Obligation Law § 5-335 ("GOL § 5-335"), the Defendant Medicare Advantage organizations and their agents do not have a right to seek reimbursement of monies that Plaintiffs received in settlements of lawsuits. Plaintiffs also asserted a claim for violation of the New York deceptive business practices statute, N.Y. Gen. Bus. L. § 349 ("GBL § 349").

Plaintiffs originally filed this action in New York State Supreme Court for New York County. Defendants removed the case to U.S. District Court, Southern District of New York pursuant to the Class Action Fairness Act, 28 U.S.C. § 1332(d), as well as on the grounds that the claims arise under certain provisions of the Medicare Act and implicate the Federal Officer removal statute, 28 U.S.C. § 1442(a)(1).

Defendants moved to dismiss the case for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted, pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure.

Defendants' motion to dismiss the case was granted, holding that the Medicare Secondary Payer Act (the MSP Act) preempts GOL § 5-335 in this case, and provides Medicare Advantage (MA) plans the same right as the federal government to seek reimbursement of monies that Plaintiffs received in settlements of lawsuits for medical expenses. For a full reading of the case, please click here.